What can you negotiate in a home sale? With the average U.S. home sales price at $368,300, negotiating a lower price is the main way a buyer can save money.
Lower mortgage rates or better home loan terms can also help buyers save, but negotiating with the home seller can lead to bigger savings.
Beyond the customary requests such as asking a seller to pay for repairing a leaky sink and other renovations what other things are worth asking a seller to throw in to sweeten the deal? It’s almost a cliche, but in real estate almost everything is negotiable. Here are five to consider:
1- Personal belongings
A refrigerator, washer and dryer set and other appliances may be included in a home sale, but if they’re not, ask for them. The same goes with furniture and other personal belongings.
Specific items of furniture can be requested in the sale, or buyers can offer to purchase some or all of it, according to Marc Carver, the principal at Carver Property Group in Atlanta.
The structure, fixtures, outbuildings and anything attached to the land is included in the sale and is considered the “real property,” says Holly Gray, a broker at RE/MAX Pacific Realty in Bellevue, Washington state. “But when it comes to personal property, things can get tricky,” Gray says.
A home loan is for a home, not everything inside it.
“In most home purchases the buyer is obtaining a mortgage to purchase the home,” she says. “Those mortgage underwriters don’t like to see personal property negotiated in the sale of a home.
“The lender is sure to do their due diligence on the home’s market value, and when they see personal property included in the purchase contracts they see a red flag.”
“The problem with including personal items like bar stools, rugs, chandeliers, a piano and these sorts of personal items is that once they are written into the contract they inherently have value,” Gray says. “However, the document being used to buy and sell real estate is a real estate contract, used to contractually bind parties in a real estate transaction. It is not supposed to be a piano contract.”
In analyzing a mortgage application for a home that includes personal property in the real estate contract, the underwriter would have difficulty calculating the loan-to-value on the loan, Gray says.
The answer is to negotiate personal items outside of the contract that includes the home, says Gray, who has seen tractors, art supplies, lawn mowers and other items sold with a home.
2 -Replacement costs of old appliances
Always check the age of the appliances, especially the furnace, air conditioner and water heater, says John Liston, manger of strategy and operations at All Set, a website that helps people find cleaning and lawn care professionals.
“If these have aged a bit and may be close to dying, you can often negotiate some money off the purchase price in anticipation of their replacement,” says Liston, who recently bought a home in Boston.
He also recommends checking that air coming out of vents is the right temperature and that bathroom fixtures are in good shape. “These are all big jobs post-purchase that will feel like small dollars to the sellers,” he says.
3- Insurance, warranties
Denise Supplee, a real estate agent and operations director at SparkRental.com, says
she recently negotiated a sale where flood insurance was required and the seller paid for the first year — about $2,000.
Home warranties are another good thing to ask for, giving first-time homebuyers peace of mind, she says.
“Their emergency reserve may be less and having a warranty can be priceless when those repairs roll in,” Supplee says. “It is not expensive and most sellers will agree to including one.”
4 - Cars and other expensive items
Carver says he had a multi-million dollar estate in Connecticut go to contract with the deciding incentive being 2017 season tickets to New York Giants football games that were midfield, prime seats.
A buyer’s market of more supply than demand can give buyers more leverage, he says. Local market conditions such as a home being on the market for more days than average, and fewer offers for a home, can give buyers leverage.
Eddie Chang, a real estate broker and senior global real estate advisor at Realogics Sotheby’s International Realty in Kirkland, Washington state, says he’s a new Mercedes, boat, jet skis and a $1 million chandelier offered in home sales. “They’re trying to attract international buyers,” Chang says.
He represented a buyer who wanted a $1 million dining room chandelier designed by Dale Chihuly to be included with a $3.5 million condo in Seattle, but the seller didn’t want to include it in the deal and the sale fell through.
5 - Extra closing costs to pay a credit card
Seller assistance in paying closings costs is a common request in home purchases, and sellers can ask for more than they might need for the actual closing costs, says Robin Eddington, a real estate agent in Alexandria, Va.
“If there is going to be money left on the table after all loan and settlement costs are taken care of, the additional funds could be put toward things like additional condo or homeowners association fees, a better home warranty, or perhaps advance payment of local property taxes,” Eddington says.
A VA loan allows such funds to be put toward the buyer’s credit card balance, she says, adding that a VA loan is the only loan program that allows that type of use. One of her clients received $2,000 toward credit card bills from a seller, she says.